Data envelopment analysis develops a set of nonparametric and
semiparametric techniques for measuring economic efficiency among firms
and nonprofit organizations. Over the past decade this technique has
found most widespread applications in public sector organizations.
However these applications have been mostly static. This monograph
extends this static framework of efficiency analysis in several new
directions. These include but are not limited to the following: (1) a
dynamic view of the production and cost frontier, where capital inputs
are treated differently from the current inputs, (2) a direct role of
the technological progress and regress, which is so often stressed in
total factor productivity discussion in modem growth theory in
economics, (3) stochastic efficiency in a dynamic setting, where
reliability improvement competes with technical efficiency, (4) flexible
manufacturing systems, where flexibility of the production process and
the economies of scope play an important role in efficiency analysis and
(5) the role of economic factors such as externalities and input
interdependences. Efficiency is viewed here in the framework of a
general systems theory model. Such a view is intended to broaden the
scope of applications of this promising new technique of data
envelopment analysis. The monograph stresses the various applied aspects
of the dynamic theory, so that it can be empirically implemented in
different situations. As far as possible abstract mathematical
treatments are avoided and emphasis placed on the statistical examples
and empirical illustrations.
